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— Anti-Corruption News Story Curated by Anti-Corruption Digest International Risk & Compliance News

In 2017, Western Union acknowledged that it had aided and abetted wire fraud in violation of the Bank Secrecy Act. But rather than facing prosecution, the corporation — whose reported annual revenue was $5.3 billion in 2019 — entered a deferred prosecution agreement (DPA) with the United States. By agreeing to the DPA, Western Union avoided prosecution and agreed to pay $586 million to its victims, many of whom were elderly targets of consumer scams.

More recently, aerospace giant Airbus — which last year reported revenue of $70.5 billion — entered a DPA and avoided criminal prosecution for corruption in multiple countries. Officials accused Airbus of using intermediaries to bribe public officials and the company paid a $4 billion fine.

Then there’s General Motors. The automaker admitted that its faulty and long-hidden ignition problem killed at least 124 people in the span of a decade. But GM, which reported $137.2 billion in revenue in 2019, escaped prosecution by entering into a DPA in 2016 and paying a $900 million fine.

These cases are not outliers. In fact, they are typical of how major corporate crime is handled, with negotiated payments rather than prosecution, conviction and punishment. And the practice has become more common over the past decade: Syracuse University’s federal data clearinghouse TracReports noted that federal prosecutions of white-collar crime reached 9,412 in 1998, but the number had shrunk to less than 6,000 per year by 2017 and 2018. This is despite the fact that the economic costs of white-collar crime outpace the economic costs of street crime by 20-to-1.

DPAs are meant to reform a company, by increasing oversight and compliance to stop a company’s wrongdoing. But many critics contend that wrongdoers simply have their shareholders foot the bill for the required fines and move on with business as usual. As University of Virginia law professor Brandon Garrett told Vox, fines seem “like something of a worthwhile risk if you don’t always get caught.”



Source: How should we punish criminal corporations?

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